Martin Lewis is encouraging married couples and those in a civil partnership to claim a "tax perk" worth up to £1,242 before the current financial year ends on April 5. The money-saving guru told viewers of The Martin Lewis Money Show Live that more 2.1million couples could be due some “serious cash” in a backdated payment from HM Revenue and Customs (HMRC).
HMRC has previously said that people are missing out on the tax break because they don’t realise they might be eligible, particularly couples where one partner has retired, has given up work to take on caring responsibilities, or is unable to work due to a long-term health condition.
Martin explained: “There are up to 2.1million eligible couples who are not claiming this tax perk. To get it, you must be a non-taxpayer married to a basic rate taxpayer (paying 20%), and civil partnerships are included.”
He also clarified that a non-taxpayer is “literally somebody who does not pay income tax in the year” adding that volunteering doesn’t count and that the bottom line is that if “you don’t pay income tax, you’re a non-taxpayer”.
He then said the princess simply involves the non-taxpayer going to the GOV.UK website and transferring 10 per cent of their tax-free allowance to their partner. We have a bit more detail on this and links to the relevant pages at the bottom of this article.
Martin explained that both the taxpayer and non-taxpayer in the couple have the same £12,570 tax-free allowance. But the non-taxpayer can transfer £1,260 and give it to the taxpayer.
In a graph to help people understand the simplicity of the transfer, Martin said: “Their allowance [non-taxpayer] has gone down, but they’re not using it anyway, and the taxpayer’s allowance has now increased to £13,830 - 20 per cent of that is £252. If you’re eligible, you can claim back four years, that means you would get back £1,242.”
But he warned: “You need to do it now or you lose the £238 from the 2018/19 tax year. Once you claim it, you will keep getting it every year.” He also said that the current financial year is paid by a tax code change but the backdated payments are paid into your bank account or by cheque. He added: “We are talking serious cash here.”
Those who are eligible can apply at GOV.UK for free and keep 100 per cent of their claim. Successful claims will result in a reduction in the amount of tax paid by the higher-earning partner.
Backdated Marriage Allowance payments
You can claim back up to four years’ worth of the tax boost. Below is each tax year and the value of the allowance:
- 2022/23 - £252
- 2021/22 - £252
- 2020/21 - £250
- 2019/20 - £250
- 2018/19 - £238
Marriage Allowance is one of a number of benefits and reliefs available to boost family finances at a time when many are concerned with the rising cost of living.
Even if couples don’t qualify for Marriage Allowance when they first get married, a change in circumstances years later could mean they become newly eligible.
These include:
- One partner retiring and the other remaining in work
- A change in employment
- A reduction in working hours which means their earnings fall below their Personal Allowance
- Maternity, paternity, or shared parental leave
- Unpaid leave or a career break
- One partner studying or in education and not earning above their Personal Allowance
HMRC also said that if a spouse or civil partner has died since April 5, 2018, the surviving person can still claim by contacting the Income Tax helpline - find out more here. Marriage Allowance claims are automatically renewed every year, however, couples should notify HMRC if their circumstances change.
Find out more about Marriage Allowance on GOV.UK here.
To keep up to date with the latest money news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
